COMMITTEE SUBSTITUTE
FOR
H. B. 2098
(By Delegates Farris and Beane)
[Originating in the Committee on Banking and Insurance)
[February 15, l995]
A BILL to amend article four, chapter thirty-one-a of the code of
West Virginia, one thousand nine hundred thirty-one, as
amended, by adding thereto a new section, designated section
forty-five, relating to banks and banking; banking
institutions and services generally; compliance review
committees established by banking institutions; and
declaring that certain reports generated by these committees
to be confidential and nondiscoverable or admissible in
evidence.
Be it enacted by the Legislature of West Virginia:
That article four, chapter thirty-one-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be
amended by adding thereto a new section, designated section
forty-five, to read as follows:
ARTICLE 4. BANKING INSTITUTIONS AND SERVICES GENERALLY.
§31A-4-45. Compliance review committees.
(a) The Legislature hereby finds and declares that:
(1) The Legislature desires to encourage and promote strong
internal self-evaluation programs by banking institutions in West
Virginia;
(2) It is in the best interest of the citizens and bank
customers of this state to encourage candor in self-evaluative
analyses conducted by banking institutions to promote fair and
sound lending policies, asset quality and adherence to federal
and state regulatory requirements, all of which in turn promotes
overall soundness of West Virginia's banking institutions.
(b) For purposes of this section, the following words have
the meanings defined:
(1) "Banking institution" means a state chartered or
federally chartered financial institution insured by the federal
deposit insurance corporation located in this state that is authorized to maintain deposit accounts.
(2) "Compliance review committee" means a specific committee
appointed by the board of directors of a banking institution
solely for the purposes of determining that institution's
compliance with state and federal requirements; or, any other
person to the extent that person acts in an investigatory
capacity at the direction of a compliance review committee.
(3) "Compliance review documents" means only such documents
as are prepared for or created by the compliance review committee
and shall not include documents created in the normal course of
business and documents created for any other purpose in addition
to review by the compliance review committee.
(4) "Person" means an individual, group of individuals,
board, committee, partnership, firm, association, corporation or
other entity.
(c) This section applies solely to an institution's
compliance review committee, the functions of which are to
evaluate and seek to improve:
(1) Loan underwriting standards;
(2) Asset quality;
(3) Financial reporting to federal or state regulatory
agencies; or
(4) Compliance with federal or state statutory or regulatory
requirements.
(d) Except as provided in subsection (e) of this section:
(1) Compliance review documents are confidential and are
discoverable but not admissible in evidence in any civil action
arising out of or relating to matters evaluated by the compliance
review committee;
(2) Compliance review documents delivered to a federal or
state governmental agency remain confidential and are
discoverable but not admissible in evidence in any civil action
arising out of or relating to matters evaluated by the compliance
review committee.
(e) When information is required by statute or regulation to
be maintained by or provided to a governmental agency, the
provisions of subsection (d) of this section will not apply to
such information while in the possession of the governmental
agency, to the extent applicable law expressly authorizes its
disclosure.
(f) This section may not be construed to limit the discovery
or admissibility in any civil action as to any documents that are
not compliance review documents.
JUDICIARY COMMITTEE AMENDMENT
On page one, following the enacting section, by striking out
the remainder of the bill and inserting in lieu thereof the
following:
ARTICLE 4. BANKING INSTITUTIONS AND SERVICES GENERALLY.
§31A-4-45. Compliance review committees.
(a) The Legislature hereby finds and declares that:
(1) The Legislature desires to encourage and promote strong
internal self-evaluation programs by banking institutions in West
Virginia;
(2) It is in the best interest of the citizens and bank
customers of this state to encourage candor in self-evaluative
analyses conducted by banking institutions to promote fair and
sound lending policies, asset quality and adherence to federal
and state regulatory requirements, all of which in turn promote
the overall soundness of West Virginia's banking institutions.
(b) For purposes of this section, the following words have the meanings defined:
(1) "Banking institution" means a state chartered or
federally chartered financial institution insured by the federal
deposit insurance corporation, located in this state, and
authorized to maintain deposit accounts.
(2) "Compliance review committee" means a specific committee
appointed by the board of directors of a banking institution
solely for determining that institution's compliance with state
and federal requirements; or, any other person to the extent that
person acts in an investigatory capacity at the direction of a
compliance review committee.
(3) "Compliance review documents" means only those
documents prepared for or created by the compliance review
committee but shall not include documents created in the normal
course of business of a banking institution or documents created
for any purpose in addition to use or review by the compliance
review committee.
(4) "Person" means an individual, group of individuals,
board, committee, partnership, firm, association, corporation or
other entity.
(c) This section applies solely to an institution's
compliance review committee, the functions of which are to
evaluate and seek to improve:
(1) Loan underwriting standards;
(2) Asset quality;
(3) Financial reporting to federal or state regulatory
agencies; or
(4) Compliance with federal or state statutory or regulatory
requirements.
(d) Except as provided in subsection (e) of this section:
(1) Compliance review documents are discoverable but not
admissible in evidence in any civil action arising out of or
relating to matters evaluated by the compliance review committee;
(2) Compliance review documents delivered to a federal or
state governmental agency are discoverable but not admissible in
evidence in any civil action arising out of or relating to
matters evaluated by the compliance review committee.
(e) When information is required by statute or regulation to
be maintained by or provided to a governmental agency, the
provisions of subsection (d) of this section will not apply to such information while in the possession of the governmental
agency, to the extent applicable law expressly authorizes its
disclosure.
(f) This section may not be construed to limit the discovery
or admissibility in any civil action as to any documents that are
not compliance review documents.
JUDICIARY COMMITTEE TITLE AMENDMENT
A BILL to amend article four, chapter thirty-one-a of the code
of West Virginia, one thousand nine hundred thirty-one, as
amended, by adding thereto a new section, designated section
forty-five, relating to banks and banking; banking
institutions and services generally; compliance review
committees established by banking institutions; and
declaring that certain reports generated by or for these
committees be discoverable but not admissible in evidence.